illustration 17 p Rana manufactures a product by a series of mixing of ingredients. The product is packed in company's made bottles and put into an attractive carton. One division of company manufactures the bottles while another division prepares the mix that does the packing. The user division obtained the bottle from the bottle manufacturing division. The bottle manufacturing division has obtained the following quotations from an external source for supply of empty bottles. Volume no of bottles Total price offer (8) For 8,00.000 botties 14,00.000 For 12,00,000 bottles 20,00,000 The estimated cost is: Volume no of bottles Total Cost () For 8,00,000 botties 10,40,000 For 12,00.000 bottles 14.40,000 The sales value and the end cost in the mixing/packing division are: Volume no of bottles For 8,00.000 botties For 12,00.000 botties Total sales value (5) 91,20,000 1.27,80,000 Total Cost **() 10,40.000 96,80,000 ** Excluding cost of bottles There is a considerable discussion as to the proper transfer price from the bottle division to the marketing division The divisional managers salary is an incentive bonus based on profits of the centres. You are required to show for the given two levels of activity the profitability of the two divisions and the total organisation based on appropriate transfer price determined on the basis of: 0 Shared profit related to the cost (i) Market price